But the proposal was rejected on Wednesday by the union’s negotiating committee, which is sticking to the demands it has spelled out over many weeks of negotiations.
To understand why, it might help to delve more deeply into the proposal.
There are two main elements: a dues increase on high-earning actors and a change in residuals to ensure that low-earning actors get paid first.
Under current rules, SAG-AFTRA members pay $231.96 in base dues each year, plus 1.575% of covered earnings up to $1 million. The A-listers’ proposal would eliminate that cap, subjecting all covered actor earnings to the 1.575% assessment.
Clooney has estimated that would generate $50 million a year. (That sounds high, as it would imply that actors earn about $3.2 billion a year above the cap, which is the equivalent of about 160 actors averaging $21 million a year, which is a reach.)
More to the point, the major problem with this is that the SAG-AFTRA strike is not about dues. SAG-AFTRA is on strike to increase actors’ income, not to increase the funding of the union. The two things are not interchangeable. An increase in union dues could not offset payments owed by studios to actors or to the actors’ pension and health funds.
Dues are also irrelevant to the collective bargaining process, as they are not subject to negotiation between the union and the Alliance of Motion Picture and Television Producers. They are set by the SAG-AFTRA National Board, which would have to undertake a separate process, which would involve selling high-earning actors on the idea of a paying more to the union.
And while SAG-AFTRA would likely find a use for any additional money, the union is not suffering from a decline in dues. The union reported receiving $127 million last fiscal year, a significant increase from the year prior as production rebounded to pre-pandemic levels.
Fran Drescher, the president of SAG-AFTRA, explained that dues cannot be used to fund the pension and health plans in an Instagram video released Thursday night.
“That’s kind of apples and oranges,” she explained. And increase in dues, she said, “does not impact the contract that we’re striking over whatsoever.”
‘Bottom-Up’ Residual Structure
The group also proposes a residual structure in which the lowest-earning actors would be paid first, and the highest earners would get residuals last.
This appears to confuse residuals with profit participation. A-list actors can negotiate a percentage of profits, which are paid out on the backend in a “waterfall” system. As more profits come in, the money starts to flow further down, so it makes a big difference where an actor is positioned in the waterfall.
That isn’t how residuals work. Residuals are paid out at the same time to everybody who is owed them. Every time a project is sold to a new medium, or re-aired on TV, the union contracts spell out exactly who is owed what. Residuals have nothing to do with profits. There is no “waterfall,” and it doesn’t matter where an actor is positioned.
Drescher also addressed the residual proposal in her Instagram video.
“That was vetted by our very experienced union contract staff, negotiators and lawyers, and they said that it unfortunately doesn’t hold water,” she said. “Frankly this is a very nuanced house of cards.”
In other words, neither of these proposals addresses the problems that have kept actors on strike for 98 days. Those issues are: a union proposal to pay actors a share of streaming revenue, an increase in minimums to keep pace with inflation, and regulations on artificial intelligence.
The proposals appear to be motivated by a sincere desire to bring an end to the strike, coupled with a sense of noblesse oblige, suggesting that high-earning actors should sacrifice to reach that resolution.
From the standpoint of the SAG-AFTRA Negotiating Committee, however, the proposal appears to weaken the sense of unity and commitment to the committee’s proposals — which is key to reaching the best possible deal. It also suggests that high-earning actors should somehow step in to pay for things that the studios have refused to pay for — thereby lessening the pressure on the studios to pony up.
Asked what A-list actors could do to help reach a resolution, one person close to the talks suggested that they join a picket line.
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